Sadlowski v. Town of Manchester

• Decision Date: 15 March 1988
• Docket Number: No. 13227,13227
• Citation: 206 Conn. 579,538 A.2d 1052
• Court: Connecticut Supreme Court
• Parties: Elizabeth SADLOWSKI, et al. v. TOWN OF MANCHESTER, et al.

Page 1052

538 A.2d 1052

206 Conn. 579

Elizabeth SADLOWSKI, et al. v. TOWN OF MANCHESTER, et al.

No. 13227.

Supreme Court of Connecticut.

Argued Feb. 3, 1988.

Decided March 15, 1988.

Edward F. Hennessey, with whom were S. Frank D'Ercole, Hartford, Kevin M. O'Brien and John W. Cooney, Town Atty., Manchester, for appellants (named defendant, et al.).

Bourke G. Spellacy, with whom, on the brief, were R. Dial Parrott, Amy S. McCabe and Karen P. Blado, Hartford, for appellants (Homart Development Co., et al.).

Kathleen Eldergill, Manchester, for appellees (plaintiffs).

Before PETERS, C.J., and SHEA, CALLAHAN, GLASS and HULL, JJ.

PETERS, Chief Justice.

General Statutes § 8-192(a) ¹ authorizes a municipality to issue tax increment bonds with the approval of its local "legislative body." The sole issue in this case is how to reconcile this reference to "legislative body" with the provisions of a local charter that stipulate that municipal bonds generally must be authorized by a two step process including not only the approval of the local board of directors but also the favorable action of the voters of the town. The plaintiffs, residents, taxpayers and electors of the town of Manchester, brought this action against the defendants, the town of Manchester and its economic development commission, to enjoin the issuance of tax increment bonds until their approval by a referendum. ² Homart Development Corporation and the Mall at Buckland Hills Partnership were permitted to join the action as party defendants. In their answers to the complaint, the defendants responded that, as a matter of law, such bonds could validly be issued without a referendum. Faced with opposing motions for summary judgment, the trial court ruled in favor of the plaintiffs. The defendants have appealed. We find error.

The facts are undisputed. The defendants have proposed the construction of a regional shopping center in the northern part of Manchester. Planning for the project contemplates some form of assistance from the town to finance needed traffic, water and sewer improvements. Accordingly, the town, represented by appropriate agencies including its economic development commission and its board of directors, proposed the issuance of "tax increment bonds" pursuant to the authority of § 8-192 in a principal amount not to exceed $13,000,000. After a public hearing held on August 27, 1987, a bond authorization resolution was approved by the economic development commission on August 31, 1987, and by the board of directors on September 1, 1987.

The plaintiffs' lawsuit challenged the authority of the town to issue "tax increment bonds" without the approval of the voters at a town referendum. Although the board of directors is the local legislative body for most purposes, the plaintiffs maintained that the board lacks plenary authority over the issuance of municipal bonds. Such bonds, according to the plaintiffs, fall within the terms of § 5-25 of the Manchester town charter, which permits the town to "incur indebtedness by issuing its negotiable bonds" only if such bonds are "authorized by a majority vote of all the members of the Board of Directors" and approved "by the voters of the Town." ³

The trial court agreed with the plaintiffs. The court recognized that § 8-192 authorizes tax increment bonds that, in their provenance and in their impact on local tax resources, differ from general municipal obligation bonds. The court held nonetheless that Manchester's town charter requires tax increment bonds to be approved by a town referendum in addition to the affirmative vote of the town's board of directors. For this reason, the court rendered judgment in favor of the plaintiffs, enjoining the issuance of the tax increment bonds "until the development project has been favorably acted upon by the voters of the town in accordance with section 5-25 of the charter." The defendants took a timely appeal to this court.

In their appeal, the defendants urge us to overturn this judgment and to direct summary judgment in their behalf. They contend that the trial court's conclusion that a referendum was required was in error because: (1) § 5-25 of the Manchester charter was not intended to apply to the issuance of tax increment bonds under § 8-192; (2) the term "legislative body" used in § 8-192 of the General Statutes refers only to Manchester's board of directors and not to its voters; and (3) § 8-192, by its own terms, supersedes local charter provisions relating to the issuance or sale of bonds. ⁴ We agree with the defendants in principle.

I

Before we reach the merits of the defendants' claims of error, we must consider whether events have so overtaken this litigation that the appeal has become moot. Mootness implicates the subject matter jurisdiction of this court. We have consistently held that we do not render advisory opinions. If there is no longer an actual controversy in which we can afford practical relief to the parties, we must dismiss the appeal. Board of Education v. Board of Labor Relations, 205 Conn. 116, 124-25, 530 A.2d 588 (1987); Shays v. Local Grievance Committee, 197 Conn. 566, 571, 499 A.2d 1158 (1985); Connecticut Foundry Co. v. International Ladies Garment Workers Union, 177 Conn. 17, 19, 411 A.2d 1 (1979); Reynolds v. Vroom, 130 Conn. 512, 515, 36 A.2d 22 (1944).

The plaintiffs urge us to dismiss this appeal on the ground of mootness. Although we lack a formal record of the events that transpired subsequent to the judgment of the trial court, it appears to be undisputed that, as a result of that judgment, the board of directors voted to hold a referendum to obtain voter approval of the proposed tax increment bonds. On November 3, 1987, the Manchester voters rejected the proposed bond issue. Since that time, the Manchester board of directors and the developers have been engaged in negotiations for an alternate method of financing that would substitute a partial tax abatement for tax increment bonding. These negotiations have not yet been finalized, and their validity is coming under renewed challenge.

Given this uncertain state of the record, we agree with the defendants that they are entitled to an appellate resolution of their claims of error. Lacking assurance that there is no longer any practical relief that we can afford the parties, we are obligated to consider their appeal on its merits. Our decision will not only clarify the authority of the town of Manchester to issue tax increment bonds in the future, but will, in all likelihood, enable the present defendants to pursue their claims concerning the tax increment bonds to which they have previously agreed.

II

In order to address the defendants' specific claims of error, we can usefully begin with a description of tax increment bonds. Tax increment bonds are sui generis. They are authorized by a special chapter of the General Statutes, chapter 132, §§ 8-186 through 8-200b, enacted in 1967 to facilitate municipal development projects. For this purpose, § 8-192(a) permits municipalities to issue bonds "which are payable solely from and secured by: (1) A pledge of and lien upon any or all of the income, proceeds, revenues and property of development projects, including the proceeds of grants, loans, advances or contributions from the federal government, the state or other source, including financial assistance furnished by the municipality or any other public body pursuant to this chapter; (2) taxes, in whole or in part, allocated to and paid into a special fund of the municipality pursuant to the provisions of section 8-192a; or (3) any combination of the methods in subsections (1) and (2) of this section." Tax increment bonds differ from the municipal bonds that chapter 109 of the General Statutes authorizes municipalities to issue for capital improvement projects. In contradistinction to tax increment bonds, general municipal obligation bonds engage the borrowing power of a municipality and are repayable from its tax base; for that reason, the legislature has imposed ceilings on the aggregate amount of such indebtedness that a municipality may undertake. General Statutes §§ 7-369, 7-374. Tax increment bonds are excluded from such ceilings by § 8-192(a) unless portions of the bond repayment have been advanced from town funds. Because no such advance has been made in this case, the trial court recognized that "[these] bonds will not be a general obligation of the town, other tax revenues of the town will not be used to repay them, and they will not affect the plaintiffs' taxes."

A

From this perspective, we turn to the defendants' claim that the trial court erred in concluding that § 5-25 of the Manchester charter applies to tax increment bonds issued pursuant to § 8-192(a). The defendants maintain that the referendum that the charter prescribes for the financing of "any capital project which the Town may lawfully construct or acquire" pertains only to those capital improvements that are funded by general municipal obligation bonds and not to municipal development projects funded by tax increment bonds. We agree.

In order to determine the proper scope of § 5-25, we must examine the language of the section itself and of related provisions of the charter that may shed light on the charter's intent and purpose. See Galvin v. Freedom of Information Commission, 201 Conn. 448, 456, 518 A.2d 64 (1986); Shelby Mutual Ins. Co. v. Della Ghelfa, 200 Conn. 630, 637, 513 A.2d 52 (1986); Peck v. Jacquemin, 196 Conn. 53, 63, 491 A.2d 1043 (1985). Looking at the charter as a whole, we are persuaded that the only bonding governed by § 5-25 is general municipal obligation bonding that constitutes a charge on the town's taxpayers. Indeed, in 1947, when the Manchester charter was first adopted, other forms of municipal bonding, such as tax increment bonds, had not yet been authorized by the General Assembly. Furthermore, the bonding provisions in the charter reflect the...